Having to earn back confiscated toys never really helped me much as a kid, so I try a different approach with my daughter. She has about 20 small buckets with lids that have her toys in them. 15 buckets stay high out of reach in the closet and 5 of them stay on her shelf for free access. The only rule she has with them is that she can't open a new bucket til the other one is cleaned up. The bucket is small and holds a small pile of toys so the mess is small even if she chooses to leave it out, which I allow her to do in her own room if she chooses.
If she wants toys in another part of the house she knows she needs to clean them up nicely when I ask or she doesn't get to play with toys outside of her room for a few days. She usually doesn't have a problem picking them up because she likes to be able to bring them out of her room to play when she wants to.
When she gets bored with her 5 buckets I switch out a few of the buckets with the ones up in the closet. After rotating them all every so often she plays with each set about once a month, which keeps them fun, fresh, and interesting each time we get a new set out. This cracks down on boredom, which is a major plus. Toys last ages this way and the hassle is small. The system works really well, and I only have to enforce two rules: 1. One bucket out at a time. 2. Toys outside of her bedroom get cleaned up nicely when asked or no toys outside of the room for a while.
No kid wants to clean up a huge pile of mess. No adult does either. It is tedious and daunting, not to mention frustrating. A kid can be happy with just a few things, like a couple of dolls and a few dresses, and it eliminates all of the problems. Keep it small, keep it simple, keep it happy. Hope that helps! :)